Commissioner of Income-tax Vs. Agarwal Transformers P. Ltd. - Court Judgment

Excerpt:
- - thus, in our view, electric generator clearly falls under renewable energy devices and the income-tax appellate tribunal has rightly allowed the depreciation at the rate of 30 per cent, on the basis of item (10a), clause (xiii) of appendix i to the income-tax rules, 1962. 4. the reference is accordingly answered in favour of the assessee and against the revenue.n.n. mathur, j.1. the income-tax appellate tribunal, jaipur, under section 256(1) of the income-tax act, 1961, has sought the opinion of this court on the following question of law :'whether, on the facts and in the circumstances of the case, the income-tax appellate tribunal was justified in law in holding that generator set falls within the category defined in clause (xiii) of item (10a) of appendix i of the income-tax rules, 1962, and as such is eligible for depreciation at the rate of 30 per cent. ?'2. the reference application pertains to the assessment years 1984-85, 1985-86 and 1987-88. the respondent-assessee is a company carrying on the business of re-rolling of stainless steel pattas through hot and cold process. the asses-see claimed depreciation on generator set at the rate of 30 per cent. on the basis of item (10a) in the depreciation schedule in appendix i. in the opinion of the assessing officer, the generator set is not run on wind energy as such it is not covered by item at (10a) and as such the higher depreciation was not permissible on that count. the assessing officer, however, allowed the depreciation at the normal rate of 15 per cent, on the generator set. the commissioner of income-tax (appeals) confirmed the finding of the assessing officer. however, the income-tax appellate tribunal was of the view that the generator being a renewable energy device, the depreciation of 30 per cent. was allowable. in order to appreciate the controversy involved, it will be convenient to extract the relevant entry at clause (xiii) of item (10a) of appendix i appended to the income-tax rules, which reads as follows :'any special devices including electric generators and pumps running on wind energy.'3. according to the rules of construction, where two or more words which are susceptible of analogous meaning are coupled together noscitur a sociis, they are understood to be used in their cognate sense. they take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general. thus, in our view, the words electric generator must be construed ejusdem generis. the electric generator by itself generates electricity and therefore does not fall within the renewable energy devices. it is different from pumps run on wind energy, which falls within the renewable energy devices. thus, it is erroneous to say that the condition 'run on wind energy' is also attached to electric generators. even grammatically neither, nor the word 'both' is used after the word 'pumps' in the relevant entry and this also clarifies that the condition running on wind energy is only attached to the word 'pumps' and not to the electric generators. a further reading of the entry shows that it is inclusive, it refers to two different items, namely, electric generators and, secondly, the pumps runningon wind energy. thus, in our view, electric generator clearly falls under renewable energy devices and the income-tax appellate tribunal has rightly allowed the depreciation at the rate of 30 per cent, on the basis of item (10a), clause (xiii) of appendix i to the income-tax rules, 1962.4. the reference is accordingly answered in favour of the assessee and against the revenue.